[Solved] The assets which can be converted into cash within the short (2024)

FAQs

[Solved] The assets which can be converted into cash within the short? ›

A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and marketable securities.

The correct answer is Liquid Assets. The assets which can be converted into cash within the short period of time is called as Liquid Assets. Examples of liquid assets may include cash, cash equivalents, money market accounts, marketable securities, short-term bonds, or accounts receivable.

Current assets : Assets which can be converted into cash easily within a short time say one year are called as current assets. Eg. Debtors, Inventories, short term investments,bank and cash balances etc.

Liquid assets, however, are the assets that can be easily, securely, and quickly exchanged for legal tender. Your inventory, accounts receivable, and stocks are examples of liquid assets — things you can quickly convert to hard cash.

Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets, while tangible items are less liquid.

Current assets are assets that can be easily converted into cash and cash equivalents (typically within a year). Current assets are also termed liquid assets and examples of such are: Cash. Cash equivalents.

Solution: Approximately the assets that can be converted into cash within a very short period are known as current assets. Current assets consist of cash equivalent, stock, cash, marketable securities, and other liquid assets.

Assets like stocks and bonds are very liquid and can be converted into cash within days. Larger assets and tangible items such as property and equipment are often not as liquid since they need to be sold before you can use and spend the cash that they are worth, which can take weeks or months.

Liquidity refers to the business's ability to manage current assets or convert assets into cash in order to meet short-term cash needs, another aspect of a firm's financial health.

What is the ease with which an asset can be converted quickly into cash with little or no loss? ›

Liquidity = The ease with which an asset can be converted to cash without serious loss.

Current assets: Current assets are short-term assets that can be easily converted into cash within a year. Examples include bank accounts, accounts receivable, debtors, stock, inventory, and prepaid expenses.

Financial liquidity refers to how easily assets can be converted into cash.

Liquidity: a means of converting assets into cash without undue loss of value.